Staff reporter
Zimbabwe’s largest milk processor, Dairibord Holdings Limited plans to sell 25 properties to raise US$4.12 million this fiscal year to finance its retooling agenda and enhance dairy production in the beverage and food sectors.
The company issued mandates to four registered estate agents in January to facilitate the disposal of properties deemed excess to requirements. The proceeds from these sales will be utilized to finance planned capital expenditures aimed at increasing production and sales volumes.
In an exclusive interview with Dairibord chairperson, Josphat Sachikonye emphasized the company’s readiness to capitalize on emerging opportunities.
“As part of its growth strategy, the organization will continue to explore avenues for expansion, both domestically and regionally, while ensuring a sustainable and responsible approach to business operations”
“The toll manufacturing project in South Africa is at an advanced stage and is anticipated to enhance foreign currency earnings and mitigate some risks associated with the group’s local operations,” said Sachikonye.
To date, one property in Chiredzi has been sold. This property, with a book value of ZWL$850 million, was sold for ZWL$712 million, resulting in a loss of ZWL$138 million. This sale is part of Dairibord's broader strategy to overcome challenges posed by obsolete equipment, which has negatively impacted industrial capacity utilization. Retooling has been identified as a key step for businesses to improve capacity utilization, and many firms, including Dairibord, have embarked on this path in recent years.
The Dairibord 2023 annual report stated that the total value of the 25 properties at the date of the last valuation is US$4.12 million.
“As at the date of this report, one property has since been sold (Stand 335 Chiredzi) which had a book value of ZWL$850 million and was sold for a total of ZWL$712 million, hence realising a loss of ZWL$138 million”
“Subsequent to year-end, the assets designated for disposal were classified as Non-Current Assets Held for Sale in line with the requirements of International Financial Reporting Standard 5. However, the assets held for disposal do not qualify for classification as a discontinued operation,” the report stated.
The report also highlighted the importance of energy efficiency in Dairibord's operations.
“The company has made significant investments in energy-efficient equipment and mandated the use of LED illumination to reduce its carbon footprint.
“Our substantial expenditures and contribution to the emission of air pollutants, including greenhouse gases, result from our reliance on non-renewable energy sources. As an effort to alleviate these effects, we have invested in energy-efficient equipment and mandated the use of LED illumination, among other measures” the report stated.
It added that ZESA tariff system has additionally facilitated the avoidance of penalties through the promotion of energy consumption during off-peak periods.
“We are committed as a business to reducing our carbon footprint and investigating renewable energy sources to satisfy our energy requirements,” the report concluded.
Dairibord's strategic sale of properties and focus on retooling are expected to significantly boost its production capabilities and position the company for sustainable growth in the competitive dairy industry.
